HR Technology Column

The ground we all stand on is constantly shifting. Wouldn't
business get boring otherwise? The latest tremor is Deloitte's acquisition of
HR research and analyst firm Bersin & Associates. Yes, we're losing another
one of our younger, nimble firms, but the new "Bersin by Deloitte"
may be better than without Deloitte.

Don't
for a moment think you are in some corporate backwater as an HR executive or
practitioner, HR-IT person or technology vendor. The latest small evidence
you're not are the sleepless nights you may have just spent getting compliant
with the new payroll and tax rules from the federal government. Washington
acts, and you need to respond fast.

Sounds
like being on the front lines to me, even though this time in a traditional
role.

Our
industry is constantly changing: the pieces are always moving on the
chessboard; areas of business concern rise and fall; occasionally new products
change the game. Even those of us who follow these changes full time as part of
our jobs often throw our hands up in despair at ever really keeping up. It's
one (truly unselfish) reason I can't believe some people think attending the HR
Technology® Conference every two or three years is sufficient. They
miss so much in-between.

These
musings are prompted by the recently announced acquisition of HR research and
analyst firm Bersin & Associates by Deloitte, following the October
acquisition of Knowledge Infusion.

I
lump them together not because they do the same thing (though there is some
overlap), or because I happen to be friends with the founders of both, but
because, to me, they represent the "teen-aged" start-ups in our
services world now going off to college.

Each
has been thriving by doing some of what much larger and older firms do
(Gartner, Forrester, Corporate Executive Board for Bersin; Accenture, Mercer,
Towers for KI) differently, more nimbly and often at about one-fifth the cost!

If
you're not yet a client of either, I don't think you've missed out on that fee
arbitrage. I've already written about
KI, so let's focus on Bersin.

Founder
Josh Bersin was already an experienced computer industry executive (10 years at
IBM, six years at Sybase), when he was laid off in 2001 by DigitalThink, an
e-Learning vendor which had acquired Josh's own e-learning start-up, Arista,
the standard 18 months earlier. Later Convergys bought them both.

He
was joined nine months later by his colleague Chris Howard. Together they wrote
a report under contract for IDC about 50 e-learning companies, later expanded
into a book, The Blended Learning Book: Best Practices, Proven
Methodologies, and Lessons Learned, published by Wiley.

In
2003, Josh started the website www.Bersin.com
simply to sell the book. "I was amazed" he says, "when someone
actually bought it, and I realized people would pay for research!" He
started selling subscriptions to the expanded site for training professionals
for $395 a year.

"Later
people started bugging me to call it a 'membership,' not a 'subscription,' he
says. "And I thought, 'A member of what?' and we decided to offer a
'high-touch' experience where everyone at the firm would talk to clients on the
phone."

Josh
broadened the company's coverage into the performance arena with the help of
client Adam Miller, CEO of Cornerstone, who was doing the same on the product
side. But really, until 2005, the company thrived solely as a specialist
learning management system research firm for two reasons: Josh knew more about
the subject than anyone on the planet and still does! Plus the firm nailed how
to do research based on broad customer surveys, not just through talking with
vendors and sharing the smart thoughts in analysts' heads.

That
year, Josh hired Leighanne Levensaler to research this new category called
"talent management," and in a few years, the firm broke out of its
LMS niche into the full world of HR.

Previous Columns:

It
may be hard to remember how utterly chaotic TM was seven years ago, with vendor
claims, counter-claims and outright lies flying in every direction. But through
incredible hard work, piercing intelligence and a little necessary obsession (I
suspect), Leighanne figured it all out, explained it to everybody else and came
to be seen as the area's leading expert.

No
dummy, I recruited her to write the scripts for four talent-related Shootouts
at the HR Technology Conference, starting in 2006 with the first Integrated
Performance and LMS Shootout (when no vendor had all the apps) and ending with
her fourth on Integrated Talent Management in 2009. Moments after the winner
was announced, Leighanne started work as vice president of HCM product strategy
at Workday. No dummies, either.

By
2009, Bersin & Associates was firmly established as an HR research firm.
Then Josh started pushing the market with his maturity models and frameworks.
And finally got serious about making some money.

By
creating a better website platform for information retrieval (called Bersin
Insights®), the company moved its 400-500 research members from a
flat yearly fee of just $10,000 for five seats (actually sat in by dozens of
employees at each member, of course) to company fees ranging as high as
$150,000 a year. Finally about 18 months ago, Josh says the firm started
breaking even.

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After
years of ignoring potential investors and acquirers, Josh hired an investment
banker and Deloitte stood out from those interested.

"We
realized they would not take us apart," he says, "but instead want to
do something big with us." That includes building a product business, now
called Bersin by Deloitte, that Deloitte has never had before. He was also
attracted by the fact that unlike other Big Four firms, Deloitte had not spun
off consulting from accounting and audit, and the partners still ran the place
on accounting's arm's-length principles of independence and being a
"trusted adviser."

The
question of Bersin's continued independence after this acquisition has been
roiling through theConference LinkedIn
Group since the announcement. I have long thought about the subject this
way:

Every
technology analyst firm positions itself as objectively reporting on vendors
and their products for its corporate clients. Yet those firms also have many of
the same vendors they're writing reports about as paying customers: The vendors
are looking for product, positioning and marketing advice they can use with
their corporate prospects, potentially even the analyst firms' clients!

You
want to talk about conflict of interest? There it is, and everyone in a
position of influence in our world has one. OK, the Corporate Executive Board
never took vendor money, but it just became a vendor itself by buying SHL!

So
the question isn't whether an analyst or consultant has a conflict of interest,
but how much integrity and good judgment they bring to managing their conflict
of interest. Frankly, with the power and resources of Deloitte (about $6
billion in U.S. consulting revenue) now behind it, I think Bersin &
Associates will become as independent as it always wanted to be!